India Journal: ‘Tis the Season to be Shopping

When India’s increasingly confident consumers decide to spend their hard-earned rupees, what to buy isn’t always as important as when to buy.

Every country has its own shopping seasons, usually around annual festivals or public holidays. There’s Christmas in most western countries, Lunar New Year in China and in India of course the sparkling shopping season of Diwali.

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Shoppers in the city of Ahmedabad thronged a popular market ahead of Diwali last year.

The festival of lights is an auspicious time to welcome Lakshmi, the goddess of wealth. It’s when we Indians splurge on shopping, but the real ones bringing Lakshmi in are the retailers. They depend on Diwali consumers who are ready to spend and looking for the latest products and the best deals. If you want to succeed in this country, you have to understand how Diwali is different from Christmas in the U.S. and Europe.

First, the selling begins in the month of August with the kick-off around Rakhi festival or Independence Day. That’s when retailers start to advertise (that’s right, it has already started). The sales go on until Diwali which is usually in October or November. This year it falls on Nov. 5. The Diwali sales are highest on the festival day of Dhanteras (“dhan” means wealth). On this day it is customary to buy gold or silver jewelry or household appliances.

Second, while the Christmas buying is for gifting, during Diwali Indians buy everything from clothes to cars, mostly for themselves and their families. This is why you will see large number of families moving around malls together, which of course really ratchets up the pester power for kids.

There are all kinds of Diwali gifts but for the most part people hand out mithai, or traditional sweets, and recently the trend seems to be designer chocolates. Last Diwali, my cousin and I got so much chocolate that we decided to share the wealth and drove around town distributing the mountain of chocolate to street kids.
Third, Indians generally don’t borrow to buy. Most Indians will put money aside throughout the year to spend during Diwali. Companies also give bonuses (usually a month’s salary) to their employees on Diwali.

While consumer financing is increasingly popular, less than 20% of deals done in consumer durable retail is through loans. Unlike the West, you will rarely see credit card debt shoot up after the festive buying season here.

Fourth, all states don’t buy during Diwali. The diversity of India is reflected in its different buying seasons. Most of north and west India buys during Diwali, but many regions have their own festivals. People from Kerala buy during Onam in August. Tamil Nadu shoppers shop during Pongal in February. Baisakhi in April is important in Punjab. Durga Puja in October is the peak season in Bengal.

Indian retailers have tried to move shoppers away from the single shopping season mentality. They would love to have Memorial Day sales, Labor Day sales and Thanksgiving sales like retailers in the U.S. India’s retailers have been trying to promote Akshay Tritiya in April as a mini-Diwali for shopping. But as this season has mainly been promoted by retailers without much religious sentiment, it has met with a lukewarm response.

At Vu Technologies, we start preparing for our Diwali line-up in April. As soon as the fiscal year begins, we research new products, start production, make ad campaigns, drop prices and increase distribution. Most electronic brands do 40% of their yearly business during the festive season and many retailers do most of their business during this time too.

If you want to understand the Indian consumer, you have to understand Diwali and the importance of timing. Consumers may have very specific demands about the auspicious day or time a product should be delivered and installed. You need to be ready to deliver it adorned with a garland of flowers.

Of course it is not all about timing. While Indians value their various religious festivals, across the country everyone values a good deal. Increasingly they can be tempted outside of the auspicious times by signs screaming “SALE,” “SPECIAL OFFER” or “FREE.”

Devita Saraf is CEO of Vu Technologies and Executive Director of Zenith Computers in Mumbai.

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